Did BP respond to the oil spill in a manner that was appropriate to .pdf
- 1. Did BP respond to the oil spill in a manner that was appropriate to stockholders or did they take a stakeholder view? Solution Ans:- BP will take stakeholder view because they are the owner, so stakeholders are needed to give their view in oil spill. The BP oil spill released 4.9 million barrels of oil into the Gulf of Mexico and caused a grave amount of damage to the surrounding areas both environmentally and economically. The states most impacted were Louisiana, Mississippi, Alabama, Texas, and Florida. The main stakeholders in relation to the spill were the environment, wildlife, fisherman, the oil industry, and tourist- driven businesses and communities. Directly following the spill, BP set up The Gulf Coast Claims Facility (GCCF) which was later deemed not independent and later replaced by a court supervised settlement program which took the subjectivity of the eligibility out of the equation. Three years after the oil spill, BP announces that the compensation fund was running low but they would continue to pay the settlements from their profits. Yet BP attempts to stem the flow of incoming claims using several methods, including suing the court appointed administrator and appealing claims. In January 2013, BP pleads guilty to 11 counts of felony manslaughter, one count of felony obstruction of Congress, and violations of the Clear Water and Migratory Bird Treaty Acts. BP was sentenced to pay $4 billion in fines and penalties. The Deepwater Horizon Oil Spill has shown that the regulation for spill prevention and response are not sufficient. As the oil companies will act in the best interest of themselves, it is the duty of the government to set regulation in place in the interest of the health and safety of its citizens. The government needs to act to create tighter controls on oil companies to decrease the likelihood of a repeat occurrence. Stakeholder theory simply states that the stakeholders of a company are not just its direct owners but that stakeholders are any person, group or entity that a corporation has “benefited or burdened by its actions and those who benefit or burden the firm with their actions” (Steiner, 2012; Miles, 2012). The first stakeholders impacted by the Deepwater Horizon Oil Spill were the workmen on the rig itself. When the rig exploded 126 people were on the platform, only 115 were evacuated (Cleveland, 2010). After a three day search covering 5,200 miles, the Coast Guard called off the rescue operation stating that the period for “reasonable expectations of survival” had passed. Sadly, the 11 presumed dead members of the crew would not be the only ones impacted by this tragedy. Other major stakeholders include, the environment, the Gulf fishing industry, and tourist-dependent businesses and communities. The environment is always a stakeholder in oil spills. The environmental impact of an oil spill on
- 2. sea organisms and their ecosystems has been well-documented. The Oil Pollution Act of 1990 mandates that a Natural Resources Damage Assessment be compiled for each oil spill. The assessment allows restoration efforts to be completed in the areas of most need by measuring the impact in terms of fish killed and wetland destroyed. The report compiled for the BP oil spill states that approximately 1,100 miles of coastal wetland were victim to the effects of the spill (National Academy of Sciences, 2013). It was determined that areas where vegetation and root systems were eradicated by the spill, erosion will convert marshland into open water. The U.S. Fish and Wildlife Service determined that 32 National Wildlife Refuges are at risk as a result of the oil spill, including Breton National Wildlife Refuge, the second oldest refuge in the country (Cleveland, 2010). Oil can cause harm through physical contact, inhalation, and absorption. Ingestion of oil by marine animals has shown organ damage, ulceration, lowered immune systems, skin irritation, and changes in behavior. For three years, from 2010 through 2012, 817 bottlenose dolphin deaths were reported compared to a steady average of 100 deaths per year that was documented during the previous seven years, between 2002 and 2009 (National Academy of Sciences). BP used a variety of known methods to minimize the amount of oil that would reach shore, including burning, skimming, and chemical dispersants. These methods were very effective in decreasing the volume of the oil by as much as 40%, but the long term effects of these techniques to the oceanic ecosystems remains unknown (National Academy of Sciences). It is apparent that the effects of this spill will continue to be seen for years to come